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Friday, August 27, 1999 Published at 20:01 GMT 21:01 UK


Business: The Company File

Amazon.com knows too much

Amazon.com's purchase cricles show who is buying what

Amazon.com, the online bookseller, has run into controversy over its plans to publish "purchase circles", detailing which books are most popular among customers living in certain towns or working for certain large companies.

Critics say the plans raise privacy concerns, and could make people more wary of using the Internet.

But Amazon believes it is part of its service to encourage people to buy more books - as well as CDs and videos, which are also sold on the site.

"We're taking chances, we're innovating here," said Amazon spokesman Paul Capelli. "This program is building community and adding a unique feature that never could have existed before the Internet."

The chief executive of the trade group to which Amazon belongs, the American Booksellers Association, had a different view.

"This is outrageous," said Avin Mark Domnitz. "One of the things that people are afraid of with computers is that they are so powerful, [that] they collect extraordinary amounts of information about individuals. We could create an environment where people are afraid to go online."

'Data mining' the web

The controversy demonstrates the power of retailers on the Internet to delve deeply into the pattern of individuals' lives.

The new feature, which already appears on Amazon.com's website, allows customers to find out what other people are buying - whether they work for the same company, live in the same home town, or have attended the same university.

The company compiles the information from zip code information, domain names on customer e-mail addresses, and other information submitted by customers.

It also allows comparisons between cities and companies.

The top selling book for Microsoft, not surprisingly, is "Business @ the speed of thought" by Bill Gates.

And it may be not much more of a surprise that among the top ten books purchased by employees at recently-merged DaimlerChrysler is "The German Way: Aspects of Behavior, Attitudes and Customs in the German Speaking World."

But it may be more puzzling that among the best sellers at National Semiconductor is "101 Nights of Grrreat Sex".

Or that the best selling music CD at Federal Deposit Insurance Corporation is "Zoot Suit Riot: The Swingin' Hits of the Cherry Poppin' Daddies".

Or that the top book purchased at online broker Charles Schwab is "Memoirs of a Geisha."

Privacy concerns

With Amazon's 10 million customers, there is a lot of data around. When you buy a book, the company already suggests related books you might be interested in purchasing.

It is all part of the personalised approach to marketing which Amazon says is "fun" and may encourage when they see others like themselves making similar purchases.

But others are not so sure.

"In addition to being bad practice from a privacy perspective, I think it's probably bad business," said David Sobel of the Electronic Privacy Information Center.

"This could upset businesses who are concerned about what employee purchases might tell people about them," added Deirdre Mulligan of the Center for Democracy and Technology.

Amazon has now added a feature to allow customers to opt out of the anonymous data compilation. But it is also encouraging people to suggest more categories of purchase groups that they would like to be members of.





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